5 Things You Need to Know to Start Your Day: Americas

Good morning. US traders prepare for a busy month, metals are under pressure and there are fresh warnings over yen volatility. Here’s what i [View in browser]( [Bloomberg]( Good morning. US traders prepare for a busy month, metals are under pressure and there are fresh warnings over yen volatility. Here’s what investors are talking about. — [David Goodman]( Want to receive this newsletter in Spanish? [Sign up to get the Five Things: Spanish Edition newsletter](. September trading US markets kick off September trading in earnest today after being closed for Labor Day yesterday. The month — [known for being tricky for stocks, bonds and gold]( is beginning in a more benign fashion, with global equities hovering near all-time highs. Still, US futures fell ahead of Wall Street’s reopening, while Treasuries were little changed, and the dollar was broadly stronger. Big week ahead The stakes are pretty high this month, with the Federal Reserve’s September meeting expected to see the much-awaited start of its policy easing. Markets are currently pricing in a 25 basis-point move, with a roughly one-in-five chance of a 50 basis-point cut, but how this week’s data turns out will be key. A [heavy week of reports]( kicks off with US manufacturing data later Tuesday and culminates with nonfarm payrolls statistics on Friday. A similar series of releases in August induced fears that the US economy was heading for a hard landing, whiplashing markets. Copper outlook Another big market theme as traders return from the holiday is the outlook for commodities. Goldman Sachs has [slashed its copper forecast]( for next year by almost $5,000 a ton, saying China’s increasingly disappointing economic recovery will delay an expected rebound. The same pessimism over China is also hurting iron ore, which dropped to a two-week low Tuesday after losing its hold above $100 a ton. Cathay latest Cathay Pacific Airways’ inspection of its Airbus SE A350 fleet is [focused on deformed or degraded fuel lines]( the engines of the widebody aircraft, after the discovery of the issue caused multiple flight cancellations as engineers switch out parts. The discovery on Monday prompted a sharp drop in the shares of Rolls-Royce Holdings Plc, the sole engine maker for the Airbus A350. The stock rebounded on Tuesday amid optimism that the issue can be fixed swiftly. Yen concerns Finally, the fund manager who said he was early in sounding the alarm on Japan’s rising interest rates (which he described as the “San Andreas fault of finance.”)[sees another shock coming]( Arif Husain, the head of fixed-income at T. Rowe Price, is now warning that investors have “just seen the first shift in that fault, and there is more” market volatility ahead after the nation’s rate hike in July helped trigger a sharp reversal of the yen carry trade. The yen [led gains in the Group-of-10 currencies Friday]( Bank of Japan Governor Kazuo Ueda indicated the central bank is committed to raising borrowing costs if its forecasts materialize. What we’ve been reading This is what’s caught our eye over the past 24 hours. - German stock market record [defies the country’s economic gloom](. - [Consumer spending in the UK]( got a boost from good summer weather. - UK’s new bond sale pulls in [more than £100 billion of orders](. - [VW turns on Germany]( as China targets Europe’s big EV blunder. - ECB cuts set to become trickier once[key rate falls to near 3%.]( And finally, here's what Joe’s interested in this morning Hello and welcome back. It's the first week of a new month, so of course the calendar is stacked. On Friday we get the big Non-Farm Payrolls report, which is expected to show a gain of 165K jobs and a dip in the unemployment rate to 4.2%. Right now, markets still favor a 25 (rather than 50) basis point cut at the September Fed meeting in just over two weeks. If there's one datapoint this week that could tip it to 50 it would be unexpected weakness on unemployment. There's a bunch of other data in the runup, including ISM Manufacturing (today), JOLTS (Wednesday) and Initial Jobless Claims (Thursday). [Last week on the Odd Lots podcast]( Tracy Alloway and I interviewed Adam Posen, the President of the Peterson Institute, and a former member of the BoE's Monetary Policy Committee. He was among the more critical of Powell's recent Jackson Hole speech, characterizing a text as a "rifle shot". As Posen sees it, in 2022, Powell gave a rifle shot speech, declaring that inflation would be taken care of. This time the speech was like the mirror image reverse, focusing almost entirely on cutting off further weakness in the labor market. The question then is whether the current conditions are so sufficiently lacking in nuance to merit such a sharp pivot from the Fed. Anyway, we'll see how the data and policy play out over the next couple of weeks, but it's an interesting perspective to be mindful of as the numbers come in. Joe Weisenthal is the co-host of Bloomberg’s Odd Lots podcast. Follow him on X [@TheStalwart]( Like Bloomberg's Five Things? [Subscribe for unlimited access]( to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. [Bloomberg Markets Wrap: The latest on what's moving global markets. 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